Rt Hon Rachel Reeves Mais lecture hits the nail on the head for construction.
Despite being the Conservative government’s strongest ally in their motivation to level up and enable growth, the construction industry has been plagued by political, policy, and taxation insecurity by a government which too often viewed stability as holding power.
Holding power will always be a feature of political decision-making, but the less predictable a nation’s politics becomes. the greater the chance that governments feel they need to produce policies that justify their personal worth, and too often this comes with growth instability and business insecurity.
Consistent policy doesn’t necessarily mean ‘business as usual’ and Shadow Chancellor, Rachel Reeves’ Mais speech to the Bayes Business School appeared to recognise that, as she highlighted three pillars of strategy if Labour wins the next general election.
- Stability – the most basic condition for economic security and international credibility.
- Investment – fostered through partnership, between dynamic business and strategic government.
- Reform – to mobilise all of Britain’s resources in pursuit of shared prosperity
In construction, these three pillars have been sorely lacking, with major infrastructure projects cancelled, delayed, or scaled back. Alongside tens of new policy directions, eleven new taxes on the housebuilding industry in the last four years. In addition, there is a growing list of challenges in connecting any project to the grid, in building anything or getting permission to do so, or even connecting cities and towns with transport infrastructure.
Some commentators have criticised Reeves’ speech as ‘boring,’ but growth isn’t enabled by jokes or clever slogans, instead, it is enabled by an environment where strategic visions are realised because governments recognise their duty is to enable investment and be a partner or get out of the way when they themselves are the barrier.
Several examples of how this could be achieved were cited during Reeves speech:
- Promise of planners to tackle backlogs.
- Reintroduction of mandatory housing targets and delivery of new towns.
- Updating all National Policy Statements within 6 months of coming into office.
- New British Infrastructure Council and revived Industrial Strategy Council.
- Legal requirement to retain fiscal rules.
- Commitment to supply side reforms.
- 10-year budgets for key R&D institutions.
Some may argue that not all of these are within the remit of a Chancellor because they lean into other departmental responsibilities; however, with “planning reform at the very centre of Labour’s economic and our political argument” - something the current Chancellor, Jeremy Hunt appeared to be moving toward in his 2023 Autumn Statement but dropped by the 2024 Spring Budget - there is a signal that Labour’s intention is to govern strategically across all their departments.
This is a welcomed approach because although it has started to occur under the current government, there remains many examples of that not occurring, from biodiversity net gain and its cost and delay impacts on SME builders and planning departments, to electrification expectations that see investor projects unable to go live and nationally decided planning permissions stuck in limbo.
Yet as we have seen with the Conservatives empty ‘supporting SME builders’ mantra, policy enables outcomes, not warm words and in Wales, Labour has wasted their opportunity to prove their strategic vision. Similarly in London, Manchester, and Labour-run councils, where many planning powers are devolved, there are too few examples which demonstrate best practice and ambition turning into reality.
Labour’s defence of this may be that national policy needs reform to facilitate change, and this would be a fair viewpoint; however, this question may not even matter because after years of stagnation, insecurity, and tinkering, businesses will be inspired by Reeves’ clear identification of the failures and challenges, as well as some politically uncomfortable solutions and broad roadmap principles.
It is great to once again hear a party united on topics that most politicians have avoided tackling or even discussing, and business will hope that we are entering an age of politics where career politicians finally take a backseat to conviction politics.
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